In High Spirits

If the 'bat' symbolizes

good luck and success for Bacardi, ERP will probably help the bat take

off to new heights. The company, which is well-known worldwide for alcoholic

beverages, set foot in India only two years ago. However, with speedy

adoption of information technology it is now operating from about a

dozen offices spread across the country. The cornerstone of the company's

IT strategy has been going in for ERP at a relatively early stage. "We

followed a simple structured methodology with tight project management.

The key point that was kept in mind was to enable fast implementation

in tune with our business," says Alok Biswas, IT Head, Bacardi-Martini

India.






The IT model


An ERP package may not provide a readymade solution to all the operational
woes of a company. In order to ensure that the software is truly effective,

a crucial factor that needs to be assessed is its adaptability to the

business environment. Before installation, every organization usually

reviews its existing business model to identify the areas which have

to undergo change. This also helps determine the extent of customization

required in the ERP solution. Fortunately for Bacardi, the company had

a peculiar advantage when it set up shop in India. It could easily build

a business process around the ERP software as it did not have any established

structure to tackle. This minimized the need for customization. "Being

a new company, we didn't have any existing business process. This helped

us avoid the adjustment problems which others encounter while installation

," says Biswas.






In the first phase, an IT infrastructure was set up at two sites: the
factory in Mysore and the head office in Delhi, with eight seats per

location. An initial investment of about Rs50 lakh was made for hardware

and software installation.






The company selected QAD's Mfg/Pro ERP software, on Sun's Solaris operating
system. There is a local area network setup using Windows NT file server

with Win95 clients and email, which is being provided by SITA, a managed

data network services provider.



While implementing an ERP solution, most users are usually not able
to utilize all the applications provided by the vendor. To avoid such

confusion, Bacardi adopted a cautious approach. A conscious decision

was taken to concentrate mainly on the modules meant for commercial

transactions and manufacturing. At present, the software is being applied

in areas such as purchase, inventory, accounts payable, sales order

processing, shipments and sales accounting, accounts receivables, general

ledger consolidation and reporting.






Selection and implementation


Deploying a highly business-oriented package like ERP needs proper planning
and implementation based on the requirements of an organization. Having

little IT expertise itself, Bacardi wanted to hire a consultant with

vast experience in the management and application of the concept. Andersen

Consulting was selected as the implementation partner on the basis of

its market reputation. The firm helped identify a business model around

the software and prepared a comprehensive IT strategy for Bacardi. It

suggested QAD's Mfg/Pro software because of the package's proven strength

in manufacturing. "Since we have a production base in the country,

we needed a software that could be utilized for future planning in our

manufacturing unit," explains Biswas.






Eastern Software was appointed for customization, which was done only
in a few areas like document layout and rearrangement. Before actual

installation, Linc Software, a partner of QAD, had done a trial run

in its own lab environment. QAD's role was limited to software delivery

and installation support. After the system requirements for ERP were

fulfilled, the installation at each site took less than two days. The

training on the application was provided by Andersen. "They also

identified the areas of customization based on our business needs,"

says Biswas.






The company considered ERP packages only from the MNCs, as it felt these
were more suited to its future expansion plans than packages available

from Indian vendors. "After Bacardi successfully establishes itself

in India, it wants to set up manufacturing sites in other Southeast

Asian countries as well," says Biswas. Moreover, the products developed

in India are effective only in bits and pieces and need experience and

comprehension, according to some industry experts.






Getting the benefits


In order to make the ERP package truly beneficial for the company and
its employees, it is also important for the management to involve end

users in the decision making process. Their needs and problems have

to be identified. Which was what Bacardi-Martini did, says Biswas.






Another way to maximize benefits is to minimize customization, feels
Biswas. "Although customization is essential for interface with

outsiders, it is better to adjust to the software as far as possible,"

he says. "We had complete faith in the package we selected. In

fact, we didn't even feel the need for a parallel run."






In the second phase of ERP implementation Bacardi wants to extend the
benefits by integrating all the 10-12 offices all over the country.

This will enable collaborative working and discussion. "Although

supporting an ERP package at remote places is quite difficult, we want

all our employees to utilize the information base that has been created,"

says Biswas. An extranet will also be set up to build remote access

to the ERP system. The company aims at deploying a supply-chain management

system, which will further help multiply the benefits of the company's

present IT network. The bat will then flap its wings more vigorously.

SHWETA VERMA,


in New Delhi.

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